Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Bids by Indian mills were $30-35/mt lower than asking prices quoted by overseas ferrous scrap suppliers. Deals were close to none in the market. Buyers only opted for lower-priced scrap grades or domestic alternatives as most believe markets could go into a corrective mode, considering the quick pace of increase. There is a possibility of container tightness exacerbating as many European countries are imposing lockdown restrictions again. This could result in a further rise in freight rates in the country.


Additionally, China could start imports of ferrous scrap under the ‘recycled raw material’ category from Jan 1. Participants believe there could be zero import tax and no requirement for an export license. This is likely to keep market sentiment supported and increase inquiries from Chinese mills. However, the Chinese futures market continued to trend down on Wednesday. Chinese domestic billets traded at CNY3,870/mt ex-Tangshan on Dec 23, down by CNY150/mt from a day ago. 


The weekly Davis Index for cast iron, rotors, and drums on Wednesday, settled at $457/mt cfr Nhava Sheva, up by $29/mt. Offers were scarce and only at price levels which are unviable for deals, keeping sellers and buyers both away from the market. Asking prices for cast rotors and drums from Europe and the US were above $455-460/mt cfr Nhava Sheva, with the possibility of a further rise following bullish cues in the bulk market. Buyers were unwilling to raise bids above $430-440/mt cfr Nhava Sheva. 


The daily Davis Index for containerized shredded settled at $453.93/mt cfr Nhava Sheva, up by $3.62/mt. A few small-volume deals were heard at $445/mt cfr Mundra and $450-455/mt cfr Chennai early this week, but largely, trades took a pause. Offers for shredded from the US and Europe/UK were above $455-460/mt cfr Nhava Sheva. On Wednesday some sellers even quoted $470-475/mt cfr Nhava Sheva to check the buyers’ interest citing the possibility of a sharp rise in freight rates in the coming days.


Domestic demand for rebar is strong in Dubai, and most traders chose to cater to the domestic scrap market. The Davis Index for UAE-origin HMS 1&2 (80:20) rose by $3/mt cfr Nhava Sheva to $438/mt cfr Nhava Sheva. Dubai suppliers offered #1 HMS at $440-445/mt cfr Nhava Sheva, but buyers lagged at $425/mt cfr Nhava Sheva.  


The daily Davis Index for US-origin HMS 1&2 (80:20) settled at $437.5/mt cfr Nhava Sheva, up by $2.95/mt. An absence of new offers and indications of a stronger domestic market in January aided the price rise. Buyers have turned silent and postponed restocking amid firm offers. Suppliers were not ready for trades at bid levels of $420/mt cfr. A trader sold busheling at $425/mt cfr and P&S at $410/mt cfr Nhava Sheva, which is scheduled for immediate shipment. 



The Davis Index for containerized shredded, Wednesday, settled at $453.8/mt cfr India subcontinent, up by $3.01/mt from Tuesday. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $437.76/mt cfr India subcontinent, up by $3.36/mt from Monday. Offers from US suppliers surged, supported by healthy demand from East and Southeast Asian buyers. International containerized freight prices continued to trend up amid a shortage of containers in Asia. It could take two months at the minimum for the supply-crunch to ease. 




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